Nearly two in five urban Indians plan to invest more in mutual funds in the future

Nearly two in five urban Indians plan to invest more in mutual funds in the future

Although only a quarter said they invested more in mutual funds in the last six months, this is likely to increase in the future

With increased concerns over inflation, adverse effects of the Russian-Ukrainian war on the global economy, and a range of interest rate hikes, the calendar year 2022 began with extreme volatility and uncertainty across all asset classes.

Amidst economic uncertainties, YouGov’s latest survey reveals the top three financial products where urban Indians claim to have increased their investments in the past six months are Gold (35%), Fixed deposits (26%) and Life insurance (26% each). For each of these products, more people claim to have increased than decreased their investments.

When it comes to mutual funds, an equal proportion of urban Indians claim they increased as well as decreased their investments in mutual funds in the past six months (25% and 24% respectively). The majority however made no changes to their investments in this financial product.

When looking at those who have invested more in mutual funds in the past six months, millennials (29%) held a higher proportion than Gen Z (23%) or Gen X (26%). Likewise, those living in tier II cities (30%) of India were more likely to say they have increased their mutual fund investments in past six months than those living in Tier I (26%) and Tier III (22%) cities. These results are in line with the Association of Mutual Funds in India data from 2021, which showed increased participation from small towns.

A majority of those who have invested more in mutual funds in the past six months cited the potential for long-term benefits as their primary reason (54%). More than two in five (43%) respondents said they increased their MF investments because they saw it as a means to build emergency funds for the future and almost as many (42%) stated higher returns in the short term to be their primary motivation. Investing more in mutual funds to save tax was comparatively a less popular reason (35%).

Although past investments in mutual funds were increased only by a quarter, the future looks brighter and many more individuals (38%) plan to invest more in mutual funds in the future. This claim is more strongly held by those residing in the western part of the country (41%) than those living in East (32%) and South India (37%).

Mutual funds are attracting favourable responses from other categories of investors as well. More than half of those who have invested more in stocks and crypto in the past six months are likely to say they will invest more into mutual funds in the future, which is higher than the gen pop numbers (52% of those who invested more in stocks & crypto in the past 6 months, compared with 38% of the generation population).

Data was collected online among 1007 urban respondents in India by YouGov’s Omnibus between June 14th and 17th, 2022 using YouGov’s panel of over 20 million people worldwide

 

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